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Lou
Lou, Tax Preparer
Category: Tax
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Experience:  25+ yrs Experience Personal Income Taxes - Former DM for H&R Block in California
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I am american and I just started working a server position

Customer Question

I am american and I just started working a server position at a NYC Resturante. They have not had me fill out any paper work and i am realizing that they work under the table for all new hires and only some people are on the books. I want to know is it illegal for me to work here period or is there a way for me to legally pay my own taxes even though I wont recieve a 1099 or W4. And if so, what percentage should i but putting aside to pay? I hope this makes sense. Tonight was my first shift and I want to do whats right here. Thanks
Submitted: 5 years ago.
Category: Tax
Expert:  Lou replied 5 years ago.

Hello and thank you for contacting JustAnswer. We appreciate the opportunity to be of service to you.

 

You are wise to recognize that no matter how we receive income we are responsible to pay income, social security & medicare tax.

 

Here is a link to IRS Publication 17. You will find, on page 7, information which will be helpful to you. http://www.irs.gov/pub/irs-pdf/p17.pdf

 

More specifically if you are being paid "under the table" (which is an illegal act by the employer), or receive a 1099 you will need to report your income on IRS Form 1040 using Schedule C & Form SE (link to forms & instructions attached):

 

http://www.irs.gov/pub/irs-pdf/f1040.pdf

 

http://www.irs.gov/pub/irs-pdf/i1040.pdf

 

http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

 

http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

 

http://www.irs.gov/pub/irs-pdf/f1040sse.pdf

 

http://www.irs.gov/pub/irs-pdf/i1040sse.pdf

 

 

The reason you must use a Schedule C is, unless you receive a W-2 from your employer then, in your case, are will be classified as "self-employed".

 

You should also, by the end of each 1/4, file and pay an estimated tax. Here is a link to help explain that process:

 

http://www.irs.gov/businesses/small/article/0,,id=110413,00.html

 

I am going to provide links to help you determine how much you should set aside to pay your taxes.

 

In addition to the IRS, New York State & New York City each require you pay income tax as well.

 

Here is a link to the New York City Tax Tables:

 

http://www.tax.state.ny.us/pdf/2008/inc/nyc_tax_rate_150_201.pdf

 

Here is a table for New York State Taxes:

 

For single taxpayers:
-- 4 percent on the first $8,000 of taxable income.
-- 4.5 percent on taxable income between $8,001 and $11,000.
-- 5.25 percent on taxable income between $11,001 and $13,000.
-- 5.9 percent on taxable income between $13,001 and $20,000.
-- 6.85 percent on taxable income of $20,001 and above.

You can get tax forms for New York State at: http://www.tax.state.ny.us/forms/default.htm

 

I hope this information is helpful to you.

 

If you have any further questions on this topic, be sure and get back to me.

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